The Government has announced the withdrawal of Income Tax relief for non-reimbursed homeworking expenses. From 6 April 2026, employees will no longer be able to claim tax relief from HMRC for additional household costs incurred when working from home, even where they are required to do so as part of their employment
The change was announced at Budget 2025 and represents a significant shift in the tax treatment of homeworking expenses for employees.
What Was Working From Home Tax Relief?
Under the previous rules, employees who were required to work from home to perform their duties could claim tax relief on certain additional household costs, including increased utility bills and business telephone calls. Employees could either claim relief based on actual additional expenditure or use HMRC’s flat-rate allowance of £6 per week without providing evidence of costs.
For many employees, the flat-rate method offered a simple way to receive tax relief without maintaining detailed records. The value of the relief depended on the employee’s marginal tax rate, with basic-rate taxpayers typically saving around £62 per year and higher-rate taxpayers around £124 per year.
What Has Changed from April 2026?
From 6 April 2026, employees can no longer claim claim a deduction from HMRC for homeworking household expenses that have not been reimbursed by their employer. The change applies to:
- Flat-rate claims of £6 per week
- Claims based on actual household costs
- Claims submitted through Self Assessment
- Claims made using a Personal Tax Account
- Claims submitted using Form P87
HMRC is introducing new legislation to prevent deductions for additional household expenses incurred while carrying out employment duties where those costs have not been reimbursed by the employer
Why Is HMRC Removing the Relief?
HMRC states that the measure is intended to address concerns surrounding non-compliance and to improve fairness within the tax system. Following compliance checks, HMRC found that more than half of claims reviewed were ineligible, leading the Government to conclude that the relief was not operating as intended.
The Government estimates that approximately 300,000 individuals will be affected by the change
Who Is Affected?
The change affects employees who currently claim tax relief for homeworking expenses that have not been reimbursed by their employer, including:
- Remote workers
- Hybrid workers
- Employees with contractual homeworking arrangements
- Employees who are required to work from home due to the nature of their role
- Individuals who currently claim through Self Assessment or Form P87
Importantly, the withdrawal of relief applies even where an employee is genuinely required to work from home and incurs additional household costs as a result
Can Employees Still Claim Homeworking Expenses?
For additional household expenses incurred while working from home, employees generally cannot claim Income Tax relief directly from HMRC for expenses incurred from 6 April 2026 onwards. The previous route for claiming tax relief on unreimbursed homeworking expenses has been removed. Instead, if an employer reimburses eligible homeworking expenses, those reimbursements can still be paid tax-free, subject to the normal exemption rules.
Employees should be cautious about relying on older guidance or online articles published before this legislative change, as much of that information no longer applies from the 2026–27 tax year. They can, however, still make claims for eligible homeworking expenses incurred in earlier tax years, subject to HMRC’s normal time limits.
What Can Employers Still Do?
The new rules do not prevent employers from supporting employees who work from home.
HMRC has confirmed that employers may continue to reimburse eligible homeworking costs without deducting Income Tax or National Insurance Contributions where the relevant conditions are met.
This means employers may still choose to:
- Pay a qualifying homeworking allowance
- Reimburse actual additional household expenses
- Provide equipment necessary for homeworking
Businesses should ensure any arrangements comply with HMRC guidance and are appropriately documented.
Homeworking Equipment
Employers can continue to provide equipment that employees require to perform their duties from home. This may include laptops, monitors, keyboards, headsets, office desks, chairs and other work-related items.
In many cases, employer-provided equipment can be supplied without creating a taxable benefit for the employee, provided the relevant HMRC conditions are met and the equipment is primarily provided to enable the employee to carry out their role. Employees should also be aware that different tax considerations may apply where equipment is purchased personally and subsequently reimbursed by the employer.
To ensure compliance and consistency, employers should maintain clear policies covering the provision of homeworking equipment, ownership arrangements, acceptable use, reimbursement procedures and the return of equipment when employment ends.
What Should Employees Do Now?
Employees who work from home should take the opportunity to review their current arrangements and ensure they understand how the changes affect them. As tax relief for non-reimbursed homeworking expenses is no longer available, it is important to check whether your employer offers alternative support, such as a homeworking allowance, reimbursement of qualifying expenses or the provision of equipment.
Employees should also retain records of any work-related expenses that may be eligible for reimbursement and familiarise themselves with their employer’s expenses policy and claim procedures. Where there is any uncertainty regarding entitlement to reimbursements or the wider tax implications of working from home, seeking professional advice can help ensure compliance and avoid misunderstandings.
What Should Employers Do?
Employers should review their existing homeworking arrangements and ensure that employees understand the upcoming changes.
An effective policy should clearly explain:
- Eligibility for homeworking support
- Allowances and reimbursements available
- Evidence requirements
- Equipment provision arrangements
- Expense claim procedures
Clear communication will help avoid confusion among employees who may still expect to be able to claim
How The Infinity Group Can help?
Changes to employment tax rules can create uncertainty for both employers and employees. Understanding what has changed, what support remains available and how to remain compliant is essential.
The Infinity Group provides practical guidance and support to help employers review their policies, procedures and employee communications, while helping employees understand their rights, responsibilities and available options.
We also offer umbrella employment services, enabling businesses to outsource key employer responsibilities, including payroll administration, tax compliance and statutory obligations, to a trusted and experienced provider.
Our aim is to help businesses and employees stay informed, compliant and confident when navigating changes to employment tax and workplace regulations.
FAQS
Can I still claim working from home tax relief from HMRC?
No. Since 6 April 2026, employees can no longer claim tax relief from HMRC for non-reimbursed homeworking household expenses, including the former £6 per week flat-rate allowance.
Does this apply if my employer requires me to work from home?
Yes. The relief has been withdrawn even where an employee is contractually required to work from home or has no alternative workplace available.
Can my employer still pay a homeworking allowance?
Yes. The changes do not affect the existing rules that allow employers to reimburse eligible homeworking expenses or provide homeworking support where the relevant conditions are met.
Can I still claim electricity and heating costs?
No. Employees can no longer claim tax relief directly from HMRC for additional household costs associated with working from home. However, employers may be able to reimburse qualifying costs in accordance with HMRC rules.
Does this affect self-employed people?
No. These changes apply to employees claiming relief for homeworking expenses. Self-employed individuals continue to follow separate business expense rules and should seek advice based on their individual circumstances.
Should employers update their homeworking policy?
Yes. Employers should review and update their homeworking policies, expenses procedures and employee communications to ensure they reflect the current HMRC position and available support arrangements.
What should employees do if they work from home?
Employees should review their employer’s homeworking and expenses policies, check whether any support or reimbursement arrangements are available, and ensure they understand how the changes affect their position. If unsure, professional advice should be sought.